Performance Management Issues
BUS681 Compensation and Benefits
Instructor: Munich Cabble-Ware
September 21, 2015
Performance management is meant to improve the performance of the overall organization. According to Eisenhardt (1989), Lee & Jimenez (2011), “The promise of PM is grounded in the idea that clear, measurable goals, coupled with reward accountability, will encourage employees to act in the interests of the organization of their own volition, thereby making less efficient systems of organizational control unnecessary” (as cited in Campbell, 2015, pg. 47). Performance management can give insight as to how performance management impacts the attitudes and behaviors of employees. Reward systems contribute to the performance management system. Seniority pay is one that contributes to performance management. This is where an organization rewards job tenure or employees time through permanent increases to the base salary. Merit pay is also a performance base reward. The merit pay program allows employees to receive merit proliferations which are based on the performance of the employee. With the merit pay program manager look for objective and subjective performance indicators to in order see whether or not the employee will get the merit increase. Effective performance management drives the effectiveness of the merit pay program. “Merit pay systems require specific performance appraisal approaches, as noted previously” (Martocchio, 2011, pg. 65). In order to have a successful merit pay program it is contingent on the supervisor’s methodology. Performance management can be defined as, “an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization.” (Berkley HR). When managing employee performance the manager or supervisor must provide feedback so that the employee knows...